Print

Email story

Comment

Letter to the editor

Nationwide to drop 39,000 homeowners

It is the insurer's second major cut in Florida in two years.

By TOM ZUCCO, Times Staff Writer
Published August 29, 2007

Florida's ever-shrinking property insurance market just got a little smaller.

Nationwide Insurance Co. of Florida, the state's fifth-largest property insurer, announced Tuesday it will drop 39,000 homeowners and 1,600 commercial policies as they come up for renewal starting in January.

Nationwide has about 176,000 policyholders statewide, including about 15,000 in the Tampa Bay area, most of them in Pinellas County. Nationwide did not specify where in the state those policyholder cuts would occur.

The company also said it will begin dropping its dwelling fire policies.

This marks the second time in two years that the Columbus, Ohio, company has made major cuts in its Florida book of business.

"Nationwide is making some difficult choices today that will better position the company to deal with the many challenges posed by the Florida insurance market," Jeff Rommel, a Nationwide regional vice president, said in a statement.

A Nationwide spokesman said recent changes in Florida law that require insurance companies to buy more backup coverage from the state was one of those challenges.

Nationwide's move is part of what state officials say is a troubling trend of insurance companies fleeing the Florida market. More than a half-dozen companies, including Safeco Insurance, have left the state or have stopped writing policies since the 2004-05 hurricane seasons caused a combined $36-billion in insured losses. Among the changes:

- In July, State Farm said it would drop 50,000 policies starting next year.

- Last year, Liberty Mutual said it would not renew about 5,000 policies.

- Two years ago, after paying more than $1-billion in damage claims for the 2004-05 storms, Nationwide dropped more than 50,000 policies and said it would stop writing new business in the state. Allstate also stopped writing new business and decided not to renew 95,000 policies.

"It is unfortunate that this is largely reflective of what most of the private property insurance market in Florida has been doing," said Jonathon Kees, a spokesman for the Florida Office of Insurance Regulation.

Nationwide officials said they'll try to steer policyholders to Security First Insurance, a 2-year-old Ormond Beach company that absorbed many of the policies dropped by Allstate.

But many homeowners could end up in Citizens Property Insurance, the state-backed insurer that is now allowed to have rates competitive with the private market. Citizens is the state's largest property insurer, with more than 1.3-million policyholders.

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

FAST FACTS

Flight from Florida

Since the 2004-05 hurricane seasons, more than a half-dozen insurers have left the state and several major insurers have downsized. Some examples:

July: State Farm says it will drop 50,000 policies next year.

Last year: Liberty Mutual says it won't renew 5,000 policies.

Two years ago: Nationwide drops 50,000 policies and says it will stop writing new business. Allstate says it won't renew 95,000 policies and will not write new business.

[Last modified August 28, 2007, 23:16:46]